I've had this issue for quite some time - I had fixed it at one point but I'm not sure if I had hard reset my device or a software update undid my fix. Here's the setup - Apple TV 3 hooked to my tv, Sonos Playbar connected to TV by optical. When I watch movies or play music from my Home Shared iTunes library, the sound is horribly distorted and clipped. For example, I was just watching A New Hope and that entirely opening chase scene clipped during all of the low rumbles. Any explosions in the scene where the Storm Troopers first breach the rebel ship clip horribly. When listening to any music, the whole thing sounds very distorted. This ONLY happens when streaming from iTunes. All streaming services, AirPlay videos from my iPad, or music played through the Sonos app sounds awesome. It is only the one instance in which the media sits on my desktop and is pulled from Home Sharing. I've tried every option within the Audio & Video settings with regards to Dolby Digital (on, off, and auto) and have toggled the Audio between auto and 16 bit. Has anyone else experienced something similar and been able to fix this?